In July, news emerged that the Pentagon and Lockheed Martin had reached a handshake deal for the eleventh production batch of F-35 fighter aircraft, comprising 141 jets for the U.S. and other customers. Even though neither party disclosed the value of the contract nor the unit cost involved, Lockheed Martin is already making progress in decreasing the cost per plane of all three variants of the F-35. At the very beginning of the production run, that stood at over $200 million for the first two F-35As and it’s expected to dip below $80 million by 2020.
Currently, the F-35 is in Low Rate Initial Production (LRIP) and once it moves to full-rate production, costs will continue to fall considerably. That’s expected to happen in three years with the U.S. armed forces planning to transition from purchasing the F-35 in one-year blocks to a longer-term multi-year procurement strategy. Once that occurs, costs will be driven down due to economies of scale with Lockheed Martin receiving better deals on large purchases of parts and labor. Accelerating production is already having an impact on the aircraft’s unit price and the Lot 10 contract marked the first time it fell below $100 million.
That contract included 90 aircraft in total and represented a $728 million reduction in total price compared to LRIP-9. As can be seen from the following infographic, the unit cost of an F-35A fell to $94.6 million, a 7.3% reduction from Lot 9. Despite that, the U.S. Air Force and European customers still consider the operating costs a major problem. According to the latest Pentagon acquisition report, the cost per hour of operating the F-35 averages $30,000 compared to $25,500 per hour for the older F-16. Experts have said that the U.S. military may cut its planned purchase of 1,763 F-35 unless operating and maintenance costs can be reduced. The total cost of the F-35 program is expected to be $1.5 trillion over its 55-year lifespan.
*Click below to enlarge (charted by Statista)
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